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Invest in Education to Support Private Sector Growth
In Africa, extreme poverty is estimated to touch over 50% of the population, with a tripling of headcount in urban areas. Most countries in sub-Saharan Africa is in the World Bank's lowest income category of less than $765 Gross National Income (GNI) per person per year. Some of the worst are with just $90 GNI per person. Even middle income countries like Gabon and Botswana have sizeable sections of the population living in poverty. A collapse of basic infrastructure and social services, due to repeated economic crisis, since the early 1980s had led to further deterioration of cost of doing business in the continent, with many countries ending up as aid-dependent economies.
As a result of the crisis, by 2000 Africa's per capita income had plunged to about one quarter of its mid-1970s high, below the level at independence, in the 1960s. Along with the endemic malaise and failure of the most essential infrastructure for managing economies – the education system, the continent experienced massive growth of low end human capital buildup that mostly thrive on "low-skill and informal sector" activities, estimated by some to be as high as 75% of the total economy. Nearly five hundred million African entered the 21st century unable to read a book or sign their names.
Perhaps, the most compelling proofs of the economic woes and failed development efforts in Africa, put in a global context, are the trend in national literacy rate and manufacturing exports. The two indicators put against developed countries show the obvious neglect of capacity building, industrial decline and therefore increased poverty in the continent. Existing literature supports this line of thinking.
In recent years, according to government estimates, natural resources alone has accounted for 70-80% of government revenues, around 90% of export earnings and about 35% of GDP, measured at constant 1990 prices, for some countries (Angola, Gabon, Nigeria, among others). The average manufacturing export as an index of industrial output, 1970 - 1990, was barely 0.4 percent of exports, while import of manufactured goods was about 15 percent of GDP or more than 60 percent of total imports. To make things worse, towards the end of 2008, there was a global economic crisis, further threatening economies, education, productivity and the livelihood of many people in the continent.
Given the central importance of formal education to achieving economic growth and manufactured exports, some Africa Governments had engaged in "the largest social program," absorbing as much as 40% of the budgets. By 1984-85, just before the entrenchment of the structural adjustment programs, in Nigeria for instance, more than 13 million pupils attended almost 35,000 public primary schools. At the secondary level, approximately 3.7 million students were attending 6,500 schools (these numbers probably included enrolment in private schools), and about 125,000 postsecondary level students were attending 35 colleges and universities. The negative pressure on the system started in the mid
1980s, and by the 1990s it was intense that enrolment figure had declined significantly.
However, to achieve the industrial objectives, the continent has to change its value system and path of policy application. Effective policy actions in the area of human capacity development, under competent public institutions, are keys to the successful reprise of the industrial development efforts in Africa, using the following specific recommendations as a guide, proposes Hilary Nwokeabia, from UNCTAD.
These recommendations are the following:
- An organized, aggregate efficiency and capable labor force: A principal instrument in re-generating industrial growth and national industrial poles is to inject more of the available resources into competent public institutions creating an organized and capable factor endowment. This should be achieved in three - short term, medium term and long term phases.
- Vocational training: A principal short-term instrument for responding to economic crisis and industrial labor needs of the African private sector is through applied vocational trainings, upgradeable to high end capacity with time. Governments and their institutions should engage in importing highly skilled labor force as a technology transfer tool to upgrade aggregate productive efficiency to groom the young private entrepreneurship, through active vocational activities.
- Public expenditure on education: The current level of about 1% of GDP on education as against an average of 7-8% in most successful developing countries must be revised.
- Relevant skills for industrial production: In today’s globally competitive knowledge economy, updating of curricula for competitiveness needs to be a permanent undertaking of public institutions responsible for education in African countries. There is a big mismatch between the education system, particularly the curricula, and the development requirements of modern African economy, today. The subjects thought in African school date back to the early days of independence (47 years ago) whereas the global, and therefore Africa's development requirements have changed significantly. Productions have moved from labor intensive, low technology production to highly technical modes of production. These aspects of global trends in industrialization are not part of Africa's education system.
- As part of the medium to long term plan, Africa should completely revise the curricula in the schools to respond the changing global situations and its development plans. A good part of the trained labor force should also be prepared to organize - plan and regulate the activities of the economy. These should be followed with periodic operational capability-training activities as the participants engage in production.